The Insurance Reserve Fund is a Division of the South Carolina State Fiscal Accountability Authority, and reports to the
five member board through the Office of the Executive Director. The State Fiscal Accountability Authority is authorized
and required to provide insurance to governmental entities by a number of statutes. Those statutes are:

The Insurance Reserve Fund functions as a governmental insurance operation with the mission to provide insurance specifically
designed to meet the needs of governmental entities at the lowest possible cost. The Insurance Reserve Fund operates like an
insurance company, by issuing policies, collecting premiums (based in consultation with actuaries), and by paying claims from the
accumulated premiums in accordance with the terms and conditions of the insurance policies it has issued. The Insurance Reserve
Fund uses Willis Towers Watson, as its consulting actuaries in determining rates, IBNR reserves, adequacy of loss reserves, and
adequacy of policyholders equity in making management recommendations to the State Fiscal Accountability Authority regarding the
financial management of the Fund. The Insurance Reserve Fund does not receive any appropriations from the general fund.

The Insurance Reserve Fund prepares a National Association of Insurance Commissioners (NAIC) Annual Statement with the South
Carolina Department of Insurance, as required by law, reflecting the annual financial status of its insurance operation. Also, the
Insurance Reserve Fund is audited by the South Carolina Department of Insurance every three years, or more often as needed,
pursuant to Section 38-13-190 of the South Carolina Code of Laws. As a Division of the State Fiscal Accountability Authority, the
Insurance Reserve Fund also is audited annually by an independent CPA firm.

All premiums received by the Insurance Reserve Fund are deposited with the Office of the State Treasurer where the funds are
maintained as the Insurance Reserve Fund Trust Account. By statutory requirement, these funds are to be used to pay claims and
operating expenses of the Insurance Reserve Fund. The Office of the State Treasurer is responsible for investing these
funds.

The Insurance Reserve Fund uses no agents, brokers, or advertising, and does not actively solicit accounts. The lack of a
profit motive and the lack of acquisition expenses such as agents’ commissions, along with the use of the investment income in rate
determination allows the Insurance Reserve Fund to maintain the lowest possible rate structure. Not all governmental entities
elect to purchase their insurance through the Insurance Reserve Fund. The South Carolina Tort Claims Act allows political
subdivisions of the State access to other mechanisms to meet their insurance needs at their discretion. Some entities participate
in other self-insurance pools, some purchase commercial insurance, and some elect to self-insure their insurance exposures.

The Insurance Reserve Fund currently insures over $42.0 billion in property values, state and local governmental entities
which employ over 170,000 employees, over 39,000 vehicles, 5,900 state school buses and 14 hospitals with over 2,600
governmentally employed physicians and dentists.

Because South Carolina has significant hurricane and earthquake exposures, all Insurance Reserve Fund property insurance
policies include coverage for wind, flood, and earthquake. All Insurance Reserve Fund liability policies are designed to meet the
needs of governmental entities and to comply with applicable statutes.

The South Carolina Insurance Reserve Fund also provides risk management services such as driver improvement training, real
property appraisals, boiler and machinery inspections, and property engineering inspections for its various insureds.

Mission Statement

The Insurance Reserve Fund Mission is to provide Property and Liability Insurance products that meet the
needs of its governmental customers in a secure and financially responsible manner at the least possible cost.